Every day, more people are discovering the benefits of investing in Bitcoin. And for good reason. Bitcoin has outperformed even the most successful stocks in the last decade, and it can potentially bolster your long-term financial security significantly. But investing in Bitcoin can feel overwhelming. Many prospective investors need to figure out where to start with thousands of assets on the market, countless news stories, and price fluctuations that can feel dizzying. If you’re one of them, you’re in the right place. In this article, we explore what is bitcoin halving, why you should invest in Bitcoin to confidently invest and understand its potential, risks, and strategies for long-term financial growth.
One of the best ways to prepare to invest in Bitcoin is through research. Bitcoin Magazine Pro’s Bitcoin analysis can help you achieve your objectives by providing expert insights and actionable information.
Bitcoin Hits $100,000 But Where Does the Asset Go Next?
The value of one Bitcoin has exceeded $100,000 for the first time. This level is significant to the market, not just because it is a big, round number, but because breaking through it could attract new investors and increase the price further.
Since Donald Trump’s election win on November 5, the price has surged around 45%, driven by a swathe of buying pouring capital into U.S. Bitcoin-backed exchange-traded funds. For some, this price move could spark more buying interest in an already feverish market, which was already boosted by hopes that Trump will be more “Bitcoin friendly” than the current regime.
“From a technical point of view, the $100,000 level represents an important and symbolic resistance, the breach of which could attract new capital, especially due to renewed confidence among long-term investors,” says Stefano Bargiacchi, an analyst at Directa SIM.
What Do Experts Say?
As with all things BTC, there are mixed opinions on what Bitcoin smashing through the $100,000 level means. “Smashing through the $100,000 level does not represent Bitcoin going mainstream. It’s merely a psychological factor and ultimately just a number,” says Dan Coatsworth, investment analyst at AJ Bell in London.
“A lot of people have got rich from Bitcoin soaring in value this year, but this high-risk asset isn’t suitable for everyone. It’s volatile, unpredictable and is driven by speculation, none of which makes for a sleep-at-night investment,” he adds.
Chang Wei Liang, FX and credit strategist at DBS in Singapore, notes, “Bitcoin prices are buoyant with BTC adoption possibly reaching an inflection point in the US. The incoming Trump administration is seen as more Bitcoin-friendly, and 2025 could see progress in setting up a U.S. Bitcoin strategic reserve, on top of changes in regulatory guidance that could help industry growth.”
Meanwhile, Shoki Omori, chief Japan desk strategist at Mizuho Securities in Tokyo, states, “Individual investors must be excited to see the BTC price top $100,000 following the news of Paul Atkins being nominated as SEC chair. Markets knew Gensler would be stepping down and that there would be someone who would be less aggressive about Bitcoin regulations. Of course, this doesn’t mean BTC will rally forever, as there will be moves to take profits.”
The Road Ahead: What Could Bitcoin’s Price Do Next?
Bitcoin’s surge past the $100,000 mark is a milestone and a pivotal moment for the Bitcoin industry. “The confidence is spurred by an increasingly favorable regulatory environment in the U.S., particularly with the appointment of Paul Atkins to chair the SEC,” says Jeff Mei, COO at BTSE in Hong Kong. “This is likely to drive further institutional investment in the sector, giving Bitcoin more credibility and leading to a new wave of adoption.”
Mei says Bitcoin could reach even greater heights as more institutions perceive it as a viable store of value and allocate funds to Bitcoin ETFs. Geoff Kendrick, global head of digital assets research at Standard Chartered in London, agrees with this assessment. “At the end of the day, it’s just a number...but the reality is we’ve been able to get to this level because the industry has become institutionalized this year particularly – and that’s mostly the ETF inflows,” he says. “Roughly 3% of the total supply of Bitcoins that will ever exist have been purchased in 2024 by institutional money.”
Tony Sycamore, an analyst at IG in Sydney, says: “After spending the past 12 sessions working off overbought readings and rebuilding energy, BTC has smashed its way above $100k in trading today. This is likely to be the catalyst for the next wave of momentum buying, which will take it towards the next stop of $105k, before $120k in 2025.”
Kyle Rodda, senior financial market analyst at Capital.com in Melbourne, adds, “It’s a massive milestone for the true believers and possibly evidence of the asset’s legitimization. If we are talking about where we go from here, there’s reason to believe this could keep going. These end of year melt-ups often see Bitcoin more than double in value. Given the reduced regulatory risk, the continued appeal of non-fiat assets because of the perception of U.S. fiscal profligacy, and greater geopolitical risks, continued tailwinds could support prices going higher.”
The Psychological Impact of the $100,000 Mark
Bitcoin crossing $100,000 is more than a milestone; it’s a testament to shifting tides in:
- Finance
- Technology
- Geopolitics
The figure was dismissed as fantasy not long ago, but it stands as a reality. Institutional adoption is evident, as seen by the increased volume on the CME, ETFs (exchange-traded funds), and derivatives markets during U.S. hours.
Essentially, funds now need to either get involved or risk standing on the sidelines while more gutsy competitors potentially outperform. Bobby Ong, co-founder of CoinGecko in Kuala Lumpur, says, “Bitcoin reaching the $100,000 milestone marks a significant moment for the Bitcoin market, reflecting its growing maturity and mainstream adoption. The psychological importance of $100,000 is also attracting new investors and driving market sentiment. This rally demonstrates Bitcoin’s position as a leading financial innovation, solidifying its reputation as a digital store of value and a hedge against traditional economic uncertainties. It also underscores the growing acceptance of BTC as a legitimate asset class.”
Shane Oliver, chief economist & head of investment strategy at AMP in Sydney, observes, “As time goes by it’s proving itself as part of the financial system, slotting in more as a store of value as opposed to a regular asset you can value on the basis of things it produces, like shares.”
Ray Attrill, head of FX research at NAB in Sydney, says, “it’s the ultimate speculative asset, isn’t it. I wasn’t surprised ... it was probably the cleanest ‘Trump trade’. Just from a regulatory point of view and the concept of a much more easily traded asset, it’s justified its run up, though it’s now taken on a life of its own. The test will be if we do have a big puke in risk sentiment at some point, and we start to see a major stock market correction. Where does Bitcoin sit in that? I don’t know the answer.”
Richard Teng, chief executive officer of Binance in Dubai observes, “Almost 16 years since its first block was mined in 2009, Bitcoin has reached the landmark milestone of $100K per coin, placing the asset at a total market capitalization of $2.1 trillion. This also places Bitcoin firmly on the very short list of just seven assets or companies that have achieved more than $2 trillion in market capitalization, the rest being gold and tech giants NVIDIA, Apple, Microsoft, Alphabet (Google), and Amazon. With talks of a U.S. Strategic Bitcoin reserve and more companies adding Bitcoin to their corporate treasuries, we are on the precipice of true mainstream global adoption.”
Jean-Baptiste Graftieaux, CEO of Bitstamp in Luxembourg, says, “Bitcoin reaching $100,000 is a watershed moment, highlighting its resilience after a challenging few years. Despite shifts in the political and regulatory landscape, Bitcoin has proven its staying power. This milestone reflects the growing maturity of the Bitcoin market, as traditional financial institutions and retail customers increasingly embrace digital assets. Looking ahead, we anticipate broader integration of Bitcoin into retail, professional and institutional holdings and pensions, coupled with a more diverse range of trading services and instruments, mirroring the evolution of traditional finance.”
This move above $100,000 could also be a technical “sell” signal for some. “This milestone also represents an important psychological level because it is a relevant profit-taking threshold for those who invested five or 10 years ago,” says Ferdinando Ametrano, managing director of CheckSig and a professor of Bitcoin and blockchain technology at Milan-Bicocca University.
But he adds that market sentiment will likely remain buoyant, “Bitcoin is in a phase of price discovery above previous all-time highs, uncharted territory that attracts attention and speculation.”
Stefano Bargiacchi agrees, saying the $100,000 milestone could give long-term investors the confidence to hold on for further gains. “Rather than an immediate correction, crossing the key level could trigger a new uptrend phase, with the price driven by optimism and price discovery dynamics.”
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Why to Invest in Bitcoin and Factors to Consider Before Going All In
Bitcoin is one of the most popular financial assets in decades. Its meteoric rise and ability to maintain its title as the most valuable digital asset has attracted eager investors. These early adopters have benefited tremendously.
In July 2010, the price of one Bitcoin sat at about $0.08. As of mid-June 2023, it is worth more than $26,000. Bitcoin's appeal lies in its potential for high returns, decentralized nature, and hedge against inflation.What Kind of Investment Is Bitcoin?
After over a decade, there's still debate over what kind of investment Bitcoin is. Owning Bitcoin is not like owning stock in a company. Unlike a business, Bitcoin doesn't generate revenue by selling products or services.
It doesn't issue dividends or have a CEO, board of directors, or any other centralized group that sets goals or can be held accountable.
Some have argued Bitcoin should still be considered a security. Others suggest it is a commodity. Commodities are associated with raw materials like:- Metal
- Grain
- Milk
The Commodity Futures Trading Commission regulates commodity markets. This government agency also regulates foreign currency trading and is most active in Bitcoin regulation.
Still, others say it's a currency you can use to pay for goods and services. While some businesses accept Bitcoin, it needs to be more widespread. It could also be a new asset class altogether.Bitcoin and Volatility
Bitcoin's exponential growth and ability to maintain its title as the most valuable alternative asset class can mask its ascent as not linear. The upside of buying Bitcoin for a dime in 2010 is clear.
But volatility comes with significant downsides, too. Someone who bought Bitcoin in 2013 would have seen their investment tumble 80%, and it wouldn't be above water for another three years. Recent highs don't promise continued returns.
Anyone investing in Bitcoin will hope for the best but should also be prepared for significant downturns. While Bitcoin has recovered many times, it could also go to zero. For example, if several BTC platforms fail, there's a massive sell-off.
Here’s a closer look at the Bitcoin's top criticisms and their counterarguments:Can Someone Explain the Volatility?
Bears say Bitcoin's wild price fluctuations mean it's too volatile to work as a currency. Bulls say it's too early to conclude. Volatility should decrease as the market matures.
The Bear Argument
Critics argue Bitcoin is too volatile to be a reliable currency. Daily fluctuations of 5% are ordinary, not to mention occasional double-digit price moves. On May 19, 2021, its price plunged nearly 30%. It fell over 60% from November 2021 to May 2022. While it has typically rallied after these drops, bears argue the big fluctuations mean it doesn't work.
Advocates expect volatility to decrease as the market grows and mature securities like Bitcoin ETFs are likely to become available. Their reasoning: More people holding Bitcoin means less power for big single holders (aka whales) to cause price fluctuations.But Does It Work For Payments?
The Bear Argument
Critics say Bitcoin is inefficient as a means of payment. On average, it takes 10 minutes to process a single Bitcoin transaction, compared to credit cards (and cash), which take seconds. You may also incur capital gains tax on the transaction. Bears say it's impractical for daily uses like buying groceries and paying for movie tickets.
The Bull Argument
Advocates argue Bitcoin is already more efficient than credit cards. While credit card transactions are processed in seconds, they take days to settle officially, while Bitcoin transactions are finalized in an average of 10 minutes.
Bitcoin bulls also argue that third-party solutions solve the inefficiency problem. For example, Bitcoin payments are processed in as little as milliseconds through a third-party protocol called Lightning Network. Advocates expect future innovations will only make paying with Bitcoin more efficient.What About the Environmental Concerns?
The Bear Argument
One of the loudest arguments against Bitcoin is that it relies on massive computing power. According to the University of Cambridge's Bitcoin Electricity Consumption Index,1, it takes more energy to run Bitcoin than it does to power Poland. Critics argue that Bitcoin isn't worth these emissions.
The Bull Argument
Despite the energy requirements, advocates argue Bitcoin is increasingly run on renewable sources. For example, according to the Bitcoin Mining Council, two vocal advocates for Bitcoin, over 58% of Bitcoin mining used sustainable electricity in early 2022. As renewable energy gets cheaper, going eco-friendly could help miners maximize profits.
Advocates argue that Bitcoin's benefits justify energy usage, especially compared to more discretionary energy uses. For example, the Center for Global Development holds that Christmas lights likely consume more energy than the Bitcoin network.Don't Criminals Use It?
The Bear Argument
While criminal transactions are made with various currencies, critics argue that Bitcoin makes them even easier. Government officials worry that BTC enables dark web purchases, money laundering, and other illegal activity. In 2021, Secretary of the Treasury Janet Yellen said Bitcoins are used "mainly for illicit financing."
The Bull Argument
Advocates cite statistics that show BTC is mostly used for legal transactions. For example, a report3 by former CIA Acting Director Michael Morell concludes that criminal Bitcoin usage "is certainly not higher than it is in the traditional banking system and is most likely less." Another argument in Bitcoin's favor is that its public record can make illegal activity easier to spot. As digital forensics departments better track blockchain transactions, criminals may find it increasingly difficult to use Bitcoin.
But Does It Have Real Value?
The Bear Argument
One of the biggest criticisms of Bitcoin is that any meaningful value does not back it. Advocates may say its value lies in the fact that there will only ever be 21 million Bitcoins, but skeptics argue scarcity alone is not enough to justify its value. Some say it's essentially a Ponzi scheme, and its price is inflated by hype.
The Bull Argument
The counterargument is that scarcity is only a small part of what makes Bitcoin valuable. Advocates believe Bitcoin transforms how money works because it's decentralized and therefore can't be controlled by:
- A single government
- Central bank
- Company
They believe this feature will protect it from both inflation and dictators, making it revolutionary.
What About Competitors?
The Bear Argument
Even some of the industry's biggest supporters think alternatives could eventually overthrow Bitcoin as the largest currency by market cap. One reason is that Bitcoin doesn't have a central development team that can improve it, while many others do. That could make it easier for other newcomers to add new functions and innovate when necessary.
The Bull Argument
Bitcoin die-hards see its lack of a central development team as one of its most essential features. They believe this makes it the purest, most decentralized asset. Most alternatives are exploring other blockchain applications, but Bitcoin is only concerned with functioning as a peer-to-peer payment network.
Advocates see this as a competitive advantage, especially when combined with its first-mover advantage.What to Consider Before Buying Bitcoin
Whether you align with the bull or bear case, there are a few things to keep in mind before adding bitcoin to your portfolio.
Bitcoin is highly volatile and may be more susceptible to market manipulation than securities. Its holders do not benefit from the same regulatory protections applicable to registered securities, and the future regulatory environment for BTC is currently uncertain.
Bitcoin is also not insured by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation, meaning you should only buy it with an amount you're willing to lose. This may help reduce portfolio impact in case prices drop significantly.Related Reading
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4 Reasons You Should Invest in Bitcoin Ahead of a Possible Recession
The American economy has shown remarkable resilience following its recovery from the pandemic's lows. Still, a recent tumble in the stock market—some merely call it a correction—has made many experts nervous about an impending recession. When a recession looms, what does it mean to invest in Bitcoin?
Since its inception, BTC has experienced massive ups and downs, so why would investing in it before an economic downturn be a good idea?Understanding How Recessions Affect Traditional Financial Markets
Recessions can have a massive impact on traditional financial markets. Stocks and bonds fluctuate wildly during market corrections and recessions, often losing significant value.
Bitcoin is also known for its volatility, with prices that can swing drastically in any market conditions. Nevertheless, some experts believe that Bitcoin can offer a hedge against the risks associated with declining traditional markets, making it a potentially lucrative investment ahead of a recession.Bitcoin May Hedge Against Uncertainty
When fears of a recession loom, investors often pull money out of stocks and pour it into “safe haven” assets like gold. With its limited supply and uncorrelated nature, Bitcoin also attracts some of this capital. An influx of investment during a downturn could potentially increase the value of Bitcoin and make it hold its worth when other assets are declining in value.
Bitcoin Is Decentralized
Since Bitcoin is decentralized and not under the direct influence of any particular country’s economy, it may retain its value against the devaluation of other currencies and inflation.
Follow the Institutional Investors
There has been an uptick in institutional investors buying Bitcoin futures to hedge their broader portfolios. Major firms like Fidelity now offer Bitcoin funds, making it easier for people to gain exposure. This trend may simplify adding Bitcoin to your existing investment portfolio, much like some of the more prominent players in the business are doing.
Bitcoin Might Surge While Other Assets Decline
Bitcoin’s reputation for volatility is a bit outdated. This digital asset is a strong hedge against inflation and falling fiat (government currency not backed by gold) prices. I’ve seen traders make money using strategies built on buying Bitcoin during market crashes. The price moves up while the fiat’s strength drops.
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